Refund of service Tax paid on Canteen Services.

[vinay wakde]

Our company is providing and maintaining a Canteen facility in the factory for the use of workers as per Factories Act, 1948.  The Canteen facility provided in the factory is not Air conditioned or centrally heated. The operation of Canteen is outsourced to an outdoor caterer who has recovered Service Tax from us since 20.06.2012 till 22.10.2013. 

As per the para 11 of the draft CBEC Circular F. No 354/127/2012-TRU dated 27-7-2012, the term “Canteen” consciously used with  reference to entry 19 of Mega Exemption which shows intention of the Mega Exemption Notification to exempt canteen provided by an employer not having air conditioning or central heating. In view of the above, the outdoor caterers would be exempt from the levy of service tax since 20.06.2012. 

Kindly let us know whether we are eligible to get refund of Service Tax paid to the Service provider, as per Section 11B of the Central Excise Act, 1944, read with Section 83 of the Finance Act, 1994

Kindly give your avluable advice in the matter.

With Regards,

VINAY WAKDE

[PAWAN KUMAR]

As per my view, Notification No.25/2012-ST Dated 20.06.2012 w.e.f. 01.07.2012, service provided by restaurant, eating joint or a mess without any AC and Heating Facility, serving food or beverages is exempt. The draft CBEC Circular F. No 354/127/2012-TRU dated 27-7-2012, has still not issued as per the records. As you have paid service tax from 01.07.2012 to 22.10.2013, you will be eligible for refund of service tax paid. 

AI Summary

Factory Canteen Service Tax Refund Eligibility Under Section 11B of Central Excise Act & Section 83 of Finance Act A company providing canteen services for factory workers, as required by the Factories Act, 1948, outsourced operations to an outdoor caterer who charged service tax from June 20, 2012, to October 22, 2013. The company seeks advice on eligibility for a refund under Section 11B of the Central Excise Act, 1944, and Section 83 of the Finance Act, 1994, citing a draft CBEC Circular and Notification No.25/2012-ST, which exempts non-air-conditioned canteens from service tax. A respondent confirms eligibility for a refund, noting the exemption applies to services without air conditioning or heating.